For some employers, the PPACA brought with it a new motivation to self-insure the health coverage of their employees. Recently however, there have been hints that new legislation may be passed which will eliminate stop-loss insurance and therefore threaten the ability of many employers to self-insure.
To counter this, legislation has been proposed in the Senate protecting the right of employers to fund their health benefits. Titled the “The Self Insurance Protection Act”, this proposed legislation protects the right of employers to continue to offer self-funded insurance plans and pay employee healthcare costs directly.
“Stop-loss Insurance” protects companies from the financial damage that may result from oversized medical claims for their employees. By removing this option, self-insured employers would be more likely to discontinue their policies and force employees to enter the individual health insurance exchanges.
Self-Insured Employers in 2013
Currently, almost 100 million individuals receive health insurance coverage through their self-insured employers, making up almost 61% of the commercial health insurance market. Self-insurance allows employers the opportunity to offer flexible policies that can meet the specific needs of their employees. Self-insured employers can also ensure the benefits offered are managed properly, saving themselves and their employees money.
Marco Rubio, one of the key senators involved in drafting the SIPA, spoke on the necessity for ensuring employees could keep their existing coverage through their self-insured employers.
“Small and mid-sized employers should have the freedom to continue offering their employees the self-insurance health plans they are happy with.”
Senator James Risch, another creator of the bill, spoke on the new legislations effectiveness stating it “preserves employers’ and individuals’ ability to make their own insurance choices, allowing them to keep their important stop loss coverage.”
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